This article is written by our featured author, Chad Wiggins, who is a partner and co-founder of PulseOne. Chad discusses the benefits of outsourcing managed IT services, the cost of downtime, gaining access to the latest technology innovations, and more. Read Chad’s article below to learn more about IT Managed Service Providers.
Gartner defines an IT Managed Service Provider (MSP) by their ability to deliver IT services, such as network, application, infrastructure, and security, via ongoing support and active administration. Managed services can be deployed within several business models — on the customers’ premises, in a third-party data center, or in the MSP’s own data center (also known as hosting).
So why do companies choose to outsource their IT management? One of the most common reasons is freeing the business up to focus on the more strategic initiative of running the core business versus troubleshooting tech problems. Other purposes include reducing costs by avoiding significant IT issues and taking advantage of the latest technology innovations without incurring upfront capital costs or investing in the ongoing learning and management of new technology.
For small to mid-size businesses, managed IT services can provide an entire team of technology experts with a broad breadth of knowledge and expertise without the need to hire a small number of employees. While the price of outsourcing an MSP may seem higher than hiring an in-house IT specialist, the cost of downtime and access to the latest technologies can both weigh heavily in making a case for outsourcing.
The Cost of Downtime
Employees cannot work if their technology and tools are not functioning, resulting in higher downtime and massive productivity losses. According to Gartner, the average cost of IT downtime is $5,600 per minute. Because there are so many differences in how businesses operate, downtime at the low end can be as much as $140,000 per hour or $300,000 per hour on average, and as much as $540,000 per hour at the higher end1. IT MSPs provide 24/7/365 monitoring and support, radically different from the Monday through Friday 8-hour workdays of employees that also include sick days, vacation days, and holidays. Insufficient IT management can drive up the cost of ransomware attacks, which continue to increase in severity each year, leading businesses to face significant financial consequences. IBM‘s latest Cost of a Data Breach report cited that, in 2022, the average cost of a data breach globally reached $4.35 million. That is a 2.6% rise from the previous year and a 12.7% increase from 2020. According to Inc., the vast majority of cyberattacks happen to small and mid-size businesses, and 60% of small businesses go under within six months of a cyberattack2.
When companies outsource their IT management to an IT MSP, they greatly reduce their risk profile while simultaneously freeing resources up to focus on the core competencies of the business.
Access to the Latest Technology Innovation
Digital transformation continues to be a priority within companies of all sizes and across all domains. Almost every industry is adopting the digital format to improve internal operations and efficiencies, enhance customer experience, and strengthen its position in the market. Existing infrastructure and business models are being replaced by new ones and without digitalization, businesses are becoming obsolete. Companies that are getting ahead have implemented innovation in their IT departments, and the majority are succeeding via leveraging an IT MSP. Technology continues to evolve at a breakneck pace and keeping up with internal skill sets and expertise is both challenging and costly. The managed IT services model provides businesses access to technical expertise and skill sets that would be difficult and costly to maintain in-house. MSPs supply companies with a partner who uses people, processes, technology, and tools to provide services while reducing the total cost of ownership and improving operational efficiencies.
Sounds Too Good to Be True?
While there are huge pros to working with an IT MSP, there are a few drawbacks to consider, especially when you get to the partner selection process. Since an IT MSP handles multiple accounts and/or businesses, it may not be able to develop a deep understanding of your internal infrastructure, specific industry, and business needs. This is the tradeoff for MSPs to achieve economies of scale and lower managed IT service costs for businesses. Another issue may be lower on-site availability. Managed IT service personnel are not physically in the office and can often be less available to fix urgent issues. In addition, if the MSP has no office or access to local resources, it cannot offer on-site support.
Making the Decision to Outsource
Choosing to partner with an IT MSP does not mean you need to get rid of all your internal IT resources. It may be that your small IT staff does not have the bandwidth, skills, or expertise to respond to every issue that arises. Since technology is constantly changing, it’s not always possible to be an expert on everything. That’s when a company should consider outsourcing some of their IT needs to make sure their IT staff has the time to carry out day-to-day troubleshooting. So how do you choose the IT MSP right for you? When considering a new MSP, it’s important to ensure you get everything you can from your relationship. You want to find a company that’s not only a provider of services but also a partner with your business’s best interests in mind. It’s a good idea to find a pattern that specializes in working with companies in your specific industry and of your specific size. This ensures alignment in knowing your industry needs and ensuring a more reliable IT service.
At PulseOne, our team is your team. PulseOne is a business services company delivering IT management solutions to small and mid-sized companies utilizing our team of technology and results-driven experts. In short, we’re your “get IT done” people. Founded in Ventura, CA in 2002 with a commitment to creating and maintaining strong collaborative relationships with our clients, we serve strategic and day-to-day IT needs nationwide. Visit pulseone.com to learn more.
1 The 20 “The Cost of IT Downtime”
2 Inc. “60 Percent of Small Businesses Fold Within 6 Months of a Cyber Attack. Here’s How to Protect Yourself
Featured Author: Chad Wiggins, Partner & Co-founder of PulseOne